MR. FLEISCHER: Good
afternoon. The President today called Silvio Berlusconi to
congratulate him on his election victory in Italy. They had
a warm, friendly call, and both said they look forward to close
cooperation between the United States and Italy. Mr.
Berlusconi said he hoped to see the President at the June 13th NATO
leader meeting and in Gothenburg at the U.S.-EU leaders
meeting. And of course, they both look forward to the
meeting of the G-8 in Genoa. The President congratulated Mr.
Berlusconi and his coalition on their apparent victory in the Italian
Parliamentary elections.

And on personnel, there are several
announcements today. It's a busy personnel
day. The President intends to nominate P.H. Johnson to be
federal cochairperson of the Delta Regional Authority. The
President intends to nominate Joseph M. DeThomas to be Ambassador to
the Republic of Estonia. The President intends to nominate
Theodore Kattouf to be Ambassador to the Syrian Arab
Republic. The President intends to nominate Maureen Quinn to
be Ambassador to the states of Qatar. The President intends
to nominate Arlene Render to be Ambassador to the Republic of the Ivory
Coast. The President intends to nominate Marcelle Wahba to
be Ambassador to the United Arab Emirates. And the President
intends to designate John Higgins as Acting General Counsel of the
National Labor Relations Board. And finally, the President
has designated Peter Hurtgen to be Chairman of the National Labor
Relations Board.

We'll have an abundance of paper for you
shortly, if you don't have it already.

Q Mr. Fleischer, when
did the White House realize that the report contains some short-term
relief for people paying high energy prices?

MR. FLEISCHER: The President has
been very concerned all along about the prices that the American people
pay for energy. And that's why, going back to September of
last year, the President said that the United States needs a
comprehensive energy plan. One of the reasons prices are
high today is because our nation has not had one for so many
years. So in the plan that the President will propose
tomorrow, the focus will be a comprehensive solution that helps
consumers, now and in the future, by creating incentives for
conservation, by creating incentives for more supply and for
modernization of the infrastructure.

Q And what is the "now"
part? How does it help consumers now who are paying high gas
prices or aren't getting --

MR. FLEISCHER: One of the reasons,
again, that prices are high is because our nation does not have a
policy to deal with energy prices. By, for the first time in
years, focusing on a comprehensive solution, the President is confident
that markets will see that more supply is on the way, conservation is
starting to be emphasized, and the combination of more conservation and
greater supplies has an effect on markets; as those markets are
effected, has a ripple effect that benefits consumers, benefits the
economy and helps to lower prices.

Q Ari, I talked to a
market analyst today who said it will take at least a year or two to
expand refinery capacity or do any of the things that address what's
causing the problems now. If you're referring to the
gasoline market, it's the fact that there isn't a refinery capacity,
there are local shortages and so forth. So how do you
address that?

MR. FLEISCHER: Let me give you an
example of ways to help get prices down as quickly as is
possible. And that is one of the steps that the President
has directed, is for the federal government to do its part in
conserving energy by directing the Department of Defense facilities,
for example, to reduce demand by 10 percent. That helps
relieve pressure on prices and it does so immediately.

And the government is going to be looking at
other options it can take, and the plan will create incentives for
individuals to conserve. And, certainly, the more the President talks
about the need for people to conserve, the more conservation there will
be. That clearly is an immediate step. Many of
the other steps have an effect on prices over time, and that's why the
President has had this focus on a comprehensive plan.

Q Are you going to
streamline the gasoline formulation rules for the reformulated
gasoline? People say that's a big problem.

MR. FLEISCHER: As you know, the
plan will be out tomorrow. You'll be able to judge the
contents of it. But there are some proposals that would have
a very harmful effect on the environment, that would waive or create
problems under the Clean Air Act. And the President wants to
make certain that as America develops a comprehensive energy plan, we
do so in a way that is very sensitive to make sure we have a clean
environment.

Q Have you seen reports
that it looks like oil inventories are starting to increase, and that
could bring the price down a couple of weeks from now? And
is that influencing your assessment that this plan will provide
short-term relief?

MR. FLEISCHER: Well, clearly, any
time you're looking at the way things are priced, if inventories go up,
that has a helpful effect on making prices go down. And if
that were to be the case, then inventories of gasoline were to go up,
that would have a helpful effect on price, of course.

Q But you're talking
about the idea that the report will instill confidence in the market
and prices will come down. But just following on what Kelly
said, isn't it really serendipitous fortune in terms of timing that the
prices are forecast to come down following the Memorial Day weekend,
and that if you get out there tomorrow and say we're going to instill
confidence in the market, and then next week prices do come down, you
say, see, it worked; but really, it was heading in that direction
anyway.

MR. FLEISCHER: I appreciate your
crystal ball. (Laughter.)

Q I'm just going by
Energy Department forecasts, that's all.

MR. FLEISCHER: It's a reflection on
what President Bush has always said are his priorities. And
again, our nation has not had a comprehensive energy policy in
years. And that's contributed to the sky-high price of
gasoline and energy. President Bush, in the campaign, cited
this as a major problem, and that's why he alone in the campaign and he
alone in Washington, when it came to people who were taking action,
addressed this issue in September last year. He ran on it,
he said he'd do it. And upon taking office, he immediately
created this energy group to get it done.

And today he will receive the report from the
energy group, and tomorrow he will announce it. It's a sign
of the fact that the President does understand just how severe this
problem is, and he wants to make sure the American people don't have to
pay sky-high prices because of a lack of an energy policy.

Q He also pledged last
March to roll back the gasoline tax. Is he going to do
that?

MR. FLEISCHER: I'm not familiar
with that, John. Would you care to cite a quote that the
President said? I don't think you will.

Q Yes. It
was a speech, or an appearance in Plant City, Florida, March 12th, in
which he said he was going to roll back the 4.5 cent a gallon, "Clinton
gas tax," as he called it.

MR. FLEISCHER: The President always
said that -- that was at a time when Congress was taking a look at
doing that last summer -- the President said that that was not the
focus of his efforts and it would be something that he would take a
look at, but that it was never a question, something the President
endorsed during the campaign.

Q To the best of my
recollection, he said he would roll it back.

MR. FLEISCHER: No, he has not.

Q Can I follow, just
one more thing on this? Why now? This is the
first time, today, the administration is saying that its report will
help in the short-term. So what has changed within the White
House and its calculation or what it's seeing on the horizon to make
you say -- you've not before said it would provide short-term relief.

MR. FLEISCHER: I think the
administration has been very consistent about it. The
President has said, and the administration has made clear, that there
is no magic wand. But there is a need for a comprehensive
policy. And upon the announcement of a comprehensive policy,
markets will see, and consumers will see, that this administration is
serious about helping protect people from high prices for gasoline and
for energy. And that helps create an environment for prices
to go down, for supplies to go up, and for people to have the energy
and the gas they need.

Q Ari, so I could just
be perfectly clear about this --

MR. FLEISCHER: I hope
so. (Laughter.)

Q You're saying that
the promise of increased future supply in the President's plan, the
comprehensive approach and so forth, will result in lower gasoline
prices this summer?

MR. FLEISCHER: What I'm saying,
Keith, is that one of the reasons that prices are sky-high this summer
is because the federal government has done nothing about it for
years. That will come to an end tomorrow. The
President will have a policy announcement tomorrow that will signal the
seriousness to the market and to consumers that this administration
cares about the price of energy and cares about the price of gasoline
and has a serious plan to do something about it.

Q But what you're
saying, it sounds to me, is that policies over the last 8, 10 years
have helped bring us to this situation today. What I'm
asking about is whether or not what will be announced tomorrow, and the
promise of future reform and so forth, is going to lower gasoline
prices this summer?

MR. FLEISCHER: I think you should
just watch events and let them unfold. The President will
announce his plans tomorrow and then you'll be in a position to judge.

Q When economists say
that it takes longer than that -- I mean, you're not giving us a time
frame, per se, but they're saying, okay, the markets just take a lot
longer to react, probably --

MR. FLEISCHER: Different aspects
take different amounts of time.

Q But what,
specifically, are you expecting through short-term --

MR. FLEISCHER: As I've already
indicated, the President is taking action to help in the immediate here
and now by pushing the United States to conserve
more. That's something the President believes in, and that's
something his plan will reflect. And to the degree that
people conserve more energy immediately, that has an immediate
impact. And the President believes in that impact, and
that's one of the reasons conservation is such a prominent part of his
plan.

In fact, the plan is going to have 105
specific recommendations in it; 42 of them will deal with conservation,
with environmental protection, and with alternative fuel development;
35 of the 105 recommendations will deal with creating more supply and
modernizing the American infrastructure; 25 will deal with
international initiatives to increase energy resources. So
as you can see where the President's priorities line up, a host of his
recommendations focus on things like conservation.

Q Mr. Fleischer, first
of all, why did -- the President recently quoted -- or cited the
$100-billion short-term tax relief currently on the Hill, and the tax
package placed there by Congress, not by the President, as something
that will be very helpful to solving the energy crisis for
consumers. And yet, why did this -- if I understand this
correctly, the White House tried to get that number reduced or removed
on the Hill when they were putting that package
together. How do you --

MR. FLEISCHER: No, if you recall,
the President said first that the tax bill that the Congress is
considering should be made retroactive. The President called
on Congress to do so. The House passed a retroactive measure
that had $6 billion worth of relief. When it came to the
Senate, it had $100 billion worth of relief, a provision the President
supported when they took that action. He issued a statement
supporting the Senate action. We'll see what the ultimate
outcome is when it goes to a House-Senate conference. It
also still has to emerge from the Senate floor.

But the President does feel very strongly that
tax relief is the answer to many people's problems, because it puts
money in people's pockets for them to use to solve the problem they
identify as the biggest in their lives. For some families,
that's going to be the high price of gasoline. For other families,
it's more money that they can save and invest. For other
families, it's money to pay off their credit card
bills. That's the beauty of letting people keep the money
that they, themselves, earn. It has many purposes, it solves
many people's problems.

Q A lot of negotiators
on Capitol Hill will say that you guys didn't want the full $100
billion because it's going to force you to trim back on other parts of
the original tax plan.

MR. FLEISCHER: If someone was
suggesting that the President would prefer less tax relief than more, I
would urge them to reassess that assessment.

Q -- tax
relief. A separate question: Because it's clearly
part of the talking points that everybody has to blame the previous
administration for our current energy crisis, I'm curious when, at what
point in an administration cycle does blaming the past President cease
to be effective?

MR. FLEISCHER: It's not a question
of blame. The President is much more interested in solving
problems. But as the President said last September, our
nation has not had a comprehensive national energy policy, and that's
why he announced one in the middle of a campaign -- a very detailed and
specific one. And many of the provisions that the President
talked about last year will be in the plan that comes out
tomorrow. You've already seen some evidence of that.

In September, the President said the United
States should give people tax credits for putting solar panels up on
their roofs. The President ran on it, it was in the budget
he submitted to the Congress, and it will be part of the
plan. He believes in it.

Q Do you really mean to
say that this administration is not accusing the past administration,
blaming the past administration for our energy problems, given language
like the Vice President, himself, saying the Clinton administration did
stupid things? Isn't that blame?

MR. FLEISCHER: It's not a question
of blame. But our nation would have been better off if a
comprehensive national energy policy had gone into place years
ago. And let me give you an example. The
President, tomorrow, will propose that a small sliver of the Alaska
National Wildlife Refuge, ANWR, be open for development --
approximately 8 percent. ANWR is an area the size of South
Carolina. The President will propose that an area about
one-fifth the size of Dulles Airport be made available for energy
exploration.

I remember when that provision was considered
in the United States Senate in 1989, and it was not
accepted. Had that plan been accepted 11 years ago, our
nation would have more supply today than it otherwise does. That's an
example of things that did not happen in the past. That's
why when people say, well, what about just the short-term, what about
the long-term? The problem is if the government never
focuses on comprehensive solutions that include both the short-term and
the long-term, the government never gets around to the long-term, and
the government lurches from one crises to the next. And
that's why the President has proposed a comprehensive approach.

Q Can I ask you about
those numbers that you just gave us? You have a lot of
conservation measures listed here. Are you trying to
dissuade us from the notion that we've, frankly, been reporting for
weeks that the thrust of this policy is more supply? Are you
trying to sell us now that the thrust of this is conservation?

MR. FLEISCHER: No, I'm just giving
you the number of recommendations as they break down. You
also have to put them in the context of the use of energy in
America. And the use of energy in America right now is
approximately -- I think it's 84 percent that comes from fossil fuels,
and the remaining comes from renewables or nuclear. We are a
nation that is principally reliant for every flip of the switch, for
every use of an air- conditioner, for every drive of a car -- almost
every drive of a car -- on fossil fuels. That does represent
the largest amount of energy use in America.

There are a series of other renewables --
wind, solar, biomass -- that make up a smaller sliver. You
have accurate figures now on what number of recommendations the
President will propose that focus on that smaller sliver.

Q In terms of solving
the problem, we are correct in continuing to report that the President
believes that most of the solution still lies in producing more energy
and, especially, more fossil fuels?

MR. FLEISCHER: The President
believes it has to be a comprehensive focus that involves both
conservation and production.

Q Break it down for
us. Eighty percent --

MR. FLEISCHER: The report will be
out tomorrow and you'll be able to judge it for yourself.

Q Ari, back to the
question of how soon this will affect things, some of us may have
misunderstood this morning, because of your use of the word "spot
market," which is generally understood to be two or three weeks out --
were you suggesting that just the mere announcement of the President's
policy and its content would have an impact on gasoline prices over two
or three weeks? Or did you mean medium-term?

MR. FLEISCHER: I'm suggesting the
basics of supply and demand and economics, and that this is a serious
plan. This is a comprehensive plan. This is a plan that I
think people are going to recognize as some serious work by the
government to solve an important problem. To that degree
that people who become convinced that there will be greater
conservation and there will be increased supply, that has an effect on
markets. That effect on markets ripples through the economy
to the benefit of the consumer.

Q But not in the first
two or three weeks, you're not suggesting?

MR. FLEISCHER: I didn't quantify
the time frame, but I've said it can help to the degree that people
understand that it has a helpful effect on reducing demand and a
helpful effect on increasing supply. That's good for
markets; that's good for consumers; that's good for prices because they
get lowered.

Q -- were saying that
the administration had zero -- funding for conservation and alternative
energy? Is that accurate?

MR. FLEISCHER: No, that's not
accurate. As I indicated already, the President's proposal
that he made last September -- it was in the budget that he released in
February, dealing with solar power to help people warm and cool their
homes. The budget will include a series of tax incentives
dealing with other renewable types of fuels -- wind, other things of
that nature -- wind, solar, biomass.

Q Anything that's not
in the budget that's in his plan in terms of tax incentives?

MR. FLEISCHER: There are 105
recommendations I'd have to go through really thoroughly to give you an
analysis on that. Let me also mention, of course, there are
other things in the plan that the President has talked about to help
low-income people through conservation -- weatherization of people's
homes so their homes are more energy-efficient; that's a part of the
President's plan. Increasing aid for people on the LIHEAP
program, which is a program that helps low-income people pay for their
heating bills, in some cases, their electric bills on their
air-conditioning; that's a part of the President's proposal
tomorrow. These are all examples of the comprehensive nature
of the President's approach to solving the problem.

Q Can I follow on Jim's
question, Ari?

MR. FLEISCHER: Whose question are
you following on? I thought you said James.

Q Well, Jim,
James. Anyway, tell us what you mean by short-term. Because
most of the analysts on Wall Street that I've talked to over the last
couple hours say that the street has already taken into account what
they expect this report to include -- conservation measures, increased
productivity, increased transmission of power and things like that, all
of which they know will take years.

MR. FLEISCHER: I think that's an
answer you will be able to judge over time. The President
will propose on this tomorrow, and then you will be in a position to
evaluate that.

Q What do we mean by
"short-term"?

MR. FLEISCHER: I've just indicated
that's something you will be able to judge over time.

Q Ari, can you explain
why the White House is not releasing the names of the individuals and
groups that have been advising the administration on this?

MR. FLEISCHER: Well, under the law,
the White House is complying with all matters of law, all matters
containing the energy group's work. Individuals on the energy group
met with a series of people -- I think it was more than 130 -- that
represent people from the renewable community, the environmental
community, the energy development community, the suppliers, oil
companies -- a host of organizations they met with. Let me
check and see what the status of that is, and I'll be happy to see if
there's anything further I can get you.

Q But a number of
groups have asked for -- I think the environmental community, Democrats
have asked for a list, and the administration has said no, in part,
wanting to not kind of list all the people that have come in here --
privacy --

MR. FLEISCHER: Let me check what
the status is. I don't have the list of 130 with me.

Q But can you comment a
little bit on the strategy of having them closed-door meetings, and why
you would want to go that route?

MR. FLEISCHER: Well, often, groups
want to come in and meet with the White House and not have everything
they say be part of a public domain. They appreciate
that. It sometimes gives for better exchange between groups,
a better give-and-take. Some groups, of course, are going to
want to be more public about it. For example, it's no secret
you've seen many people coming in here this week, including Jimmy
Hoffa, including the President of the Carpenters Union, a group of
people who represent the renewables were here yesterday talking about
solar, and I saw many people in this room talking to those
folks. So I don't think there are any big, great secrets out
there. Certainly, the press has been talking to many of the
groups that the White House has met with.

Q If I can follow up on
--

MR. FLEISCHER: Please.

Q -- but the
environmentalists say that they have not been there, so they say that
these meetings are really more the lobbyists and industry
representatives. Environmentalists have not gotten --

MR. FLEISCHER: There have been a
host of environmental organizations. I have read some of them -- for
example, one of the wires carried a story that cited somebody from one
of the major environmental groups who came in and met with the staff of
the energy group.

Q What about -- they
were complaining in The New York Times today that they met with the
staff and not the Vice President, and the people that we just saw in
the last couple of days have met with the Vice President.

MR. FLEISCHER: There's no shortage
of people in every business who want to meet with the President or the
Vice President. The White House tries to be as accommodating
as possible. But also, meeting with the staff is a very
instructive way to have your opinions heard.

Q Doesn't it say
something about your priorities if certain industry groups are allowed
to meet with the Vice President, but environmentalists, who are going
to really also be impacted by this, get to meet only his staff?

MR. FLEISCHER: I think the plan
will speak for itself on how balanced it is and how comprehensive it
is.

Q Well, how would you
characterize the level of input that environmental groups have had?

MR. FLEISCHER: I think they've had
a serious involvement in the plan and an opportunity to have their
thoughts heard.

Q I have a follow-up to
that. The follow up is, last week the President said that
the best way to address energy prices in the short-term was to pass his
tax cut. Today you're saying the best way to address the
energy crisis in the short-term is just by releasing this report.

MR. FLEISCHER: No, no, no, no, no.

Q So I'm just wondering
if today's announcement supersedes last week's?

MR. FLEISCHER: There are two issues
here. The President has said that tax relief is one of the
most immediate ways you can help people who are paying high energy
bills. I said that 10 minutes ago -- into this
briefing. Passing tax relief -- and the President calls on
Congress to pass tax relief before Memorial Day, before the busy
driving season takes place -- gets money into the hands of consumers
quickly. Any delays means money gets into the hands of
consumers later, rather than sooner. And that's why the
President believes that Congress needs to act, and act
sooner. But in terms of a fundamental comprehensive approach
to energy, the plan that the President announces tomorrow will have a
broader effect on energy, which I said will ripple through the
economy.

Q Early on in this
process there were press reports of a lot of give-and-take within the
administration about drilling in ANWR and the political environmental
implications of it. Has the President ever wavered on that
idea?

MR. FLEISCHER: No -- when you say
the "political implications" of it -- no, the President in September
said, this is a step the United States needs to take to promote energy
independence and energy security. That's going to be
reflected in the plan that the President announces tomorrow.

Q Ari, isn't telling
people that they should use their tax cut to spend money on gasoline,
isn't that really just sort of throwing money at the problem, and
wouldn't that also help maintain the high price of gasoline by
increasing demand?

MR. FLEISCHER: Keith, it's not
taking money, it's so people can solve their own
problems. That money is not the government's to throw,
that's the people's money to keep.

Q But you're very
clearly suggesting that that's something they could spend money
on. Wouldn't that actually maintain the whole problem by
keeping prices high?

MR. FLEISCHER: What I said is that
the power of tax relief is people can use it for purposes as they deem
best and as they see fit. There will be some families who
are going to use that money to pay for the higher cost of
energy. There are going to be other families -- because of
the choices they make, not the government -- that will use that money
to invest, to save. Other people are going to use it to pay
off their credit card bill, as I indicated.

That's the beauty of tax
relief. It's targeted to the needs that people find most
important in their lives. The government doesn't have to
tell people how to spend their money; people know best how to spend it,
themselves.

Q Ari, what
opportunities does the President have to review the report before
embracing all of his recommendations?

MR. FLEISCHER: Oh, he's been part
and parcel to all the decision meetings about the plan. He's
met with the group many times. I think the final meeting,
the decision meeting right before the plan went to the printer took
place a week ago Friday, if I recall. He's been part and
parcel.

Q So he has considered
it and embraced it all now?

MR. FLEISCHER: Of
course. Of course.

Q Both of the
short-term fixes that you say will -- the President is proposing for
energy prices are indirect -- a tax cut that will get to people at some
point so they can cushion the blow of higher energy prices, and this
psychological ripple effect through the economy. It's an
acknowledgement that there is nothing specifically recommended in the
proposal to deal with short term prices.

MR. FLEISCHER: Terry, the American
people don't look to Washington for magic wands, they look to
Washington for solutions that work. And the plan the
President announces will be a comprehensive solution that focuses on
conservation and development of energy resources, and modernization of
resources, so that the nation can have an energy plan that works.

Q So why even claim
that you've got short-term fixes? It sounds as if you're
kind of grasping for a political fig leaf to slap on the program at the
11th hour to say you have a short-term fix when you don't.

MR. FLEISCHER: To state the
obvious. California, which faces blackouts, is going to be
benefitted from the fact that the federal government is going the do
its part to conserve energy. By conserving energy it has an
immediate short-term effect that can help lower prices and can avert
blackouts. It is real, it is tangible, and it's meaningful,
and that's why the President is doing it.

Q I have a question,
but before that, one comment about energy. For the first time, 46
little children from the Indian school were here in the U.S. as part of
a school subject and what they've been reading in the books they wanted
to see in reality, and they liked it, including the White
House. But they were surprised that they were reading in the
books the energy crisis in the U.S. because they thought this is only
in India.

The question also I have -- the Vice President
from the U.S. Chamber of Commerce, was speaking to the Foreign Press
Center. He said -- amendment was not needed and it should be
-- sanctions should be lifted on India and Pakistan because the
amendment never worked. And also, several number of Congress
wrote to the President --

MR. FLEISCHER: Let me ask you to
talk with Mary Ellen about that question.

Q Ari, you've got a
number of Republicans who apparently do not believe the President's
plan does enough over the short-term -- Kay Bailey Hutchison for one is
going to propose additional incentives and believes that the President
would support such a move. Is that the case?

MR. FLEISCHER: Well, it depends on
exactly what specifics are offered. The President is pleased
at the fact that he has broken the pattern in Washington where finally
the issue is being taken seriously, is leading members of Congress to
offer their ideas and more proposals. So it depends on what
she offers.

Q Ari, this
international initiative, is the President trying to deal with some
drilling in some areas that really don't have
infrastructure? Like, for instance, today Charles Rangel
outside was talking about the fact that Africa can help with these oil
prices, especially the Nigeria area. Is that part of this
international initiative, by any chance?

MR. FLEISCHER: Well, as you know,
the President met with the President of Nigeria about a week or so ago,
and the President of Nigeria did indicate that they were going to keep
production at levels that would be beneficial to the American consumer
and to the American economy. So that's a part of keeping
supply up.

And to the degree that OPEC or other
oil-producing nations keep supply at levels that are reasonable, the
United States will benefit, consumers will benefit. It's
also important, in the President's opinion, that the United States
develop its own energy resources so we're not reliant on decisions that
are made by foreign governments.

Q So the international
initiatives really don't deal with new drilling. This 105
specific proposals --

MR. FLEISCHER: The international
initiatives I mentioned, the 25 of them, deal -- again, take a look at
all 25, and you will have a chance to do that, but many of them deal
with things like development of energy supplies with Canada, with
Mexico, trilateral agreements with those nations.

Q Ari, does everything
in this plan require congressional approval, or are there going to be
some important things that you think --

MR. FLEISCHER: No, there will be
several things that will be done by executive order; there will be
several things that will be done by -- that must be done only by
Congress.

Q Can you talk in just
sort of general areas, what areas the executive order stuff would be
in?

MR. FLEISCHER: I think that's
something that you may be able to get into tonight at the background
briefing or tomorrow on the briefing.

Let me just -- on the briefing, the briefing
will be at 8:00 p.m. tonight, as I indicated. There will be
a handout available that summarizes some of the information for
you. The briefing and the handouts will be on
background. There will be no embargo, so you will be able to
use the information tonight.

Q There's a lot of
resentment building up in the West against the power companies, and
across the country against the oil companies, about the price of
energy. You've said that the administration will remain
vigilant on that. But there's a difference between what's
legal and what's right. Does the President believe that
power companies out West and the oil companies have behaved as good,
corporate citizens at this moment of crisis, as you've described?

MR. FLEISCHER: Terry, the President
is very concerned about the high prices. And he believes
that the federal government, through its investigative agencies --
principally, the FTC -- must be vigilant to make certain that nobody is
doing anything beyond the law. And to the degree they are,
their actions need to be investigated and corrected, if that is going
on. That's the President's position.

Q Has the White House
considered or discussed having Director Freeh step down before his
retirement? And have the problems that the Bureau has had
over the last few years, have they made the search for a new director
more difficult?

MR. FLEISCHER: There is no change
in that from what the President said when he took a similar question on
Friday here during his news conference. The President said
one of the factors he's going to look for in a new FBI director is not
only integrity and a law enforcement background, but someone who is a
good manager as well. The President knows how important the
FBI is to the lives of the American people and to the smooth
functioning of the government. He thinks that Director Freeh
has done a very good job at the FBI, and the search is underway for a
replacement.

Q He hasn't thought
about having Director Freeh step down early as a sign of renewed
control --

Q Ari, about the
missile defense plan, now that the consultation teams are back, is the
President disappointed by the lack of clear support expressed by the
allies? And what's the next step?

MR. FLEISCHER: No, just the
contrary. The purpose of sending the teams abroad were to
begin the process of consultation with our allies. It is the
beginning of that process. There will be additional
consultations. There was never an expectation that people would go
abroad and come back and have the allies say sign us
up. That's how this process works. And it is the
beginning; there will be more consultations to come.

Q Ari, a federal grand
jury has indicted Robert Hanssen. Does the White House have a reaction
to that, and does the President feel that this man should face the
death penalty if he's found guilty?

MR. FLEISCHER: That's not a
determination that's made by the President, that's a determination
that's made by the Justice Department.

Q -- about the
indictment, the grand jury's indictment?

MR. FLEISCHER: I don't have
anything right here. I would have to talk to the President.

Q The State Department
authorization bill with the Hyde Amendment in it has been passed in the
House. Is there any doubt the President will sign it when
the entire bill is passed and comes to your desk?

MR. FLEISCHER: I haven't had a
chance to look through the other provisions in the State Department
authorization, but now that the matter has been returned to the policy
that the President supports, unless there is something else in there,
the President will be supportive.

Q Ari, the Finance
Committee has now approved the tax cut that reduces the top marginal
rate to 36 percent. Is that close enough to what the
President wanted?

MR. FLEISCHER: The President
believes that the top rate should be what the House passed -- 33
percent. He does not believe that anybody should pay more
than one-third of their income to the federal government. And that is
the position that he supports.

Q Ari, following on
what Terry was saying, is the President sympathetic with the idea that
the oil industry went through some pretty lean years in the mid-1990s
and they need to have some substantial profits in order to engage in
exactly the type of exploration, development and infrastructure
rebuilding that the President believes they need to undertake?

MR. FLEISCHER: The President's view
is that here has to be a return to equilibrium between supply and
demand. That way, consumers can have reliable energy at an
affordable price, and that our nation's infrastructure can be
modernized and that supply can be brought on-line.

Q But is he sympathetic
to the idea that after going through some lean years, it's okay for the
oil industry to be making money hand over fist?

MR. FLEISCHER: I've just answered
your question about equilibrium in supply and demand.

Q Ari, on California,
the President's talked, as you have, about California in the context of
this energy plan a number of times. I'm wondering, does he
see California as a harbinger of things to come for the nation as a
cautionary --

MR. FLEISCHER: He's worried about
that. The President is worried about the impact that the
California problem can have on the rest of the
nation. Already, we have seen now, just this week, that
there are blackouts in some of the Midwestern states. It is
a clear problem that the President wants to deal with in a
comprehensive fashion. And that's why, at long last, the
federal government, under President Bush, will have a comprehensive
energy solution to the problems that have befallen the nation.

Q Ari, what's the
President's view of how the education package is shaping up in the
Senate? Since they've got billions of dollars being added to
that, is there a point at which it's too much?

MR. FLEISCHER: Keith, the focus the
President has always maintained on education is that the reforms are
what improves schools the most. If throwing money at
education were the solution, our schools would have been improved a
long time ago. So the President supports additional funding
for the schools coupled with reforms that focus on accountability,
testing so that parents can know if their children are indeed learning,
that schools are succeeding. But the solution is not just to
throw money at it, the solution is that reasonable increases in
spending for schools, coupled with meaningful reform.

Q So is it reasonable
what's going on in the Senate at this point?

MR. FLEISCHER: I think the
President's going to keep his eye on it. There have been some
productive conversations that continue to be held with the negotiators
in the Senate. But the President's going to continue to keep
his eye on it.

Q Ari, it appears that
Congress might move as early as June on another major tax cut bill that
would be attached to minimum wage. Does the President have
any objection to having a second bill, not necessarily limited to small
business relief either?

MR. FLEISCHER: Well, we'll just --
the President will just have to monitor what Congress is
doing. His focus right now is of course the Senate Finance
Committee only last night passed some of those very similar to the
proposal that he made. That proposal will soon go to the
Senate floor, and that's where the President is focused on now.

THE PRESS: Thank you.

MR. FLEISCHER: Thank you.

Q The President has
said, though, that --

MR. FLEISCHER: His focus remains on
the package that's before the Senate now.